Who: Dayforce, Inc. (NYSE: DAY, TSX: DAY), a global leader in human capital management (HCM) technology.
What: Reported robust financial results for the first quarter ended March 31, 2025, characterized by strong revenue growth, improved profitability, and significant cash flow generation.
When: Results disclosed on May 7, 2025, for Q1 2025.
Where: The report and financial operations encompass global markets, with operational hubs in Minneapolis, MN, and Toronto, ON.
Dayforce kicked off 2025 with a remarkable 12% increase in total revenue reaching \(481.8 million, which translates to 15% growth excluding float revenue and 17.1% growth on a constant currency basis, underscoring the company’s expanding market footprint. Recurring revenue, a critical indicator of sustainable business, rose 14.4% to \)323.1 million, reflecting robust demand for Dayforce’s consolidated platform that integrates HR, payroll, and talent management functions.
Operating profit reached \(31.0 million for the quarter, while adjusted operating profit surged by 21% to \)132.3 million. Net income more than doubled to \(14.9 million with net profit margin improving to 3.1% from 1.6% in the prior year. Adjusted EBITDA climbed to \)156.7 million, delivering a margin of 32.5%, up from 30.1% a year earlier.
Cash flow dynamics were equally impressive, with net cash provided by operating activities jumping to \(49.6 million from \)9.1 million year-over-year, boosting operating cash flow margin to 10.3%. Free cash flow turned positive at \(19.5 million, a significant turnaround from a negative \)18.8 million in the first quarter of 2024.
Dayforce’s share repurchase program remains active, with approximately \(30 million of shares repurchased in Q1 under a \)500 million authorization, cumulatively returning over $66 million to shareholders.
Customer base expansion also demonstrated healthy momentum with 6,929 live customers, a 5.4% increase year-over-year, and recurring revenue per customer improving by 11.5% to $167,600.
Strategic initiatives highlighted include an expanded partnership with Microsoft, enhancing cloud accessibility through the Microsoft Azure Marketplace and the introduction of innovative AI-powered features such as the Dayforce AI Assistant on mobile platforms and mobile-friendly enhancements in talent management workflows.
The company provided optimistic guidance for Q2 2025, forecasting total revenue between \(454 million and \)460 million, and for full-year 2025 total revenue ranging from \(1.929 billion to \)1.944 billion, reflecting sustained double-digit growth supported by recurring revenue streams and float income.
Financial Statement Impact Analysis: - Revenue Growth: Q1 2025 revenue up 12% YoY, indicating strong top-line momentum. - Profitability: Notable improvement in adjusted operating metrics enhances earnings quality. - Cash Flow: Robust \(49.6 million operating cash flow strengthens liquidity; free cash flow turns positive. - Balance Sheet: Maintains strong asset base with total assets of \)9.5 billion, including \(5.36 billion customer funds and \)557 million cash on hand. - Debt Management: Reduction in long-term debt by approximately $580 million compared to prior quarter, reflecting prudent financial management.
This performance aligns with themes from previous earnings calls where Dayforce emphasized the value of a unified, cloud-based HCM platform to drive client retention and operational efficiency. The continuous rollout of AI-enhanced capabilities and strategic cloud partnerships reiterates Dayforce’s competitive edge in the evolving HCM marketplace.
For more detailed disclosures, view the original SEC 8-K report here: Dayforce Q1 2025 8-K Report.
Tags: #DayforceQ1Results #HumanCapitalManagement #RecurringRevenueGrowth #CloudHCM #CashFlowStrength